House proposal cuts Governor's research funding

INDIANAPOLIS -- House Democrats proposed more changes to Gov. Frank O'Bannon's economic development plan on Tuesday, including reductions in potential funding for his research and scholarship initiatives.\n"It might not go as far as the governor would like to go, but it's at least a step forward," said House Ways and Means Chairman William Crawford, D-Indianapolis.\nThe committee was expected to vote on the revamped plan later Tuesday and send it to the full House for consideration. Democrats control the chamber 51-49, while Republicans control the Senate 32-18.\nUnder the changes Crawford's committee proposed, the state would sell off 35 percent of its future national tobacco settlement payments in bonds for a lesser lump sum up front. O'Bannon had sought more than $600 million by selling off 40 percent of future payments.\nO'Bannon, a Democrat, wanted to spend $360 million of that money over the next decade on research and development deals between private companies and universities and bringing resulting products to market. He considers it a cornerstone of his plan to create jobs and diversify the economy.\nBut the Democrat Ways and Means plan would only direct $250 million to such efforts, with $141 million raised through tobacco bonds going to the state's main checking account for unspecified purposes.\nThe revamped plan would fund O'Bannon proposals to aid rural development and create or expand so-called technology parks, which are essentially high-tech versions of industrial parks.\nBut it would gut O'Bannon's proposal to spend $135 million over four years to provide scholarships for as many as 22,000 students who pursue studies in four areas deemed vital to Indiana's economic growth -- advanced manufacturing, life sciences, information technology and high-tech distribution.\nUnder O'Bannon's plan, students could receive up to $4,000 a year but would have to pay some of that money back if they did not remain in Indiana after graduation. Students also would have to work at internships, and businesses would receive tax credits for providing them.\nThe Ways and Means plan would only fund the tax credits for internships, costing about $21.5 million over four years.